It is accepted that confidentiality clauses can legitimately serve to protect businesses, in terms of ensuring commercially sensitive information does not get passed on to competitors or inclusion in settlement agreements to allow parties to move on. However, it is also recognised that these clauses can also be open to unacceptable practices – such as to gag or intimidate those who have suffered from harassment or discrimination in the workplace.
Changes to Confidentiality Clauses Legislation
Legislation will shortly be introduced requiring that confidentiality clauses in employment contracts and settlement agreements do not prevent the reporting of a suspected crime to the police, regulated health and care professionals, and legal professionals. The limits on confidentiality clauses will need to be specifically and clearly included in the written particulars of employment provided at the start of employment and be the subject of independent legal advice when included in settlement agreements.
Get advice from our legally qualified Employment Law Consultants about updating your staff contracts in line with the new legislation proposals.
Essential Employment Law Advice for Businesses
As it stands, a settlement agreement will only waive statutory employment claims where a worker has received advice from an independent legal advisor as to the terms of the agreement on their ability to pursue claims in the Tribunal. The Government is to introduce a requirement to ensure that individuals must also obtain advice on the limitations of confidentiality clauses to allow the agreement to be valid.
It is likely that any confidentiality clauses that do not meet the new legislative requirements will be made void in their entirety although the remaining parts of the settlement agreement would remain valid.
Whilst these provisions are still to be drafted and not yet in force, employers should consider amending their documentation sooner rather than later to ensure employees are aware that they are not prevented from making disclosures as detailed above.
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